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Annual Results

Renold's profit

31 May 2016 07:25

Renold has booked a FY pretax profit lower at GBP7.4m, from GBP7.7m, with underlying revenue easing to GBP165.2m, from GBP181.4m.

"Ongoing success in implementing our STEP 2020 Strategic Plan has enabled us to maintain our operating margins. This was achieved despite external market challenges which resulted in a fall in revenue, as we expected," said CEO Robert Purcell.

"At the same time we have improved a number of our core business processes, developed new products ready for market launch, and enhanced customer service.

"Our acquisition of the Tooth Chain business was our first under STEP 2020 and is an excellent strategic fit. The integration process is proceeding well with customer relationships being successfully transferred to Renold Group companies.

"Management bandwidth is now available for further acquisitions in the highly fragmented chain market.

"Looking ahead, we are hopeful that market headwinds will moderate around the end of the first half of the new financial year. All three phases of STEP 2020 are now in progress.

"We are confident that the steps we are taking to improve our business will generate significant shareholder value, particularly when market conditions improve."

HIGHLIGHTS:

· RoS% of 8.6% up 0.1%

· As previously announced, revenue down 8.9% driven by external market headwinds

· Breakeven sales point lowered for third consecutive year

· Increase in Chain division operating profit and further improved RoS% to 12.1% from 10.2%

· Significant £4.0m increase in capital investment to £9.5m equating to 1.6x depreciation

· Integration proceeding well for the Tooth Chain acquisition which will be earnings enhancing in first full year of ownership

· Further significant pensions de-risking projects completed in the UK, Germany and Australia

· Banking facility amended and extended to May 2020 with rate savings and flexibility for acquisitions

Story provided by StockMarketWire.com

Related Company: RNO

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